The abolition of non-compete clauses is about freedom

The FTC has answered NAM's objection regarding trade secrets, pointing out that there are still laws against the theft of trade secrets and contractual non-disclosure agreements remain legal under their rule. These protections, they say, should be enough to prevent theft. NAM responded that these are “poor substitutes for non-compete agreements.” For one thing, companies don't always know when their secrets are being stolen. This argument boils down to this: it's better that we restrict the freedom of all our employees than risk that one of them hypothetically harms us.

The NAM also complained that trade secrets do not enjoy the same legal protection as patents. This makes me think that trade secret theft may not be as serious a matter as the NAM would have me believe. After all, the NAM said that “trade secret litigation is costly and time-consuming.” Well, suing another company is more costly and time-consuming than threatening to bury a poor former employee under an avalanche of legal fees. Similarly, I could argue that buying a candy bar at the corner store would be more costly and time-consuming than snatching one out of the hands of a five-year-old child.

The amicus curiae brief was filed by Erica T. Klenicki and Michael Tilghman II of the NAM, and Richard D. Salgado, Paul W. Hughes, and Andrew A. Lyons-Berg of the law firm McDermott Will and Emergy LLP. I mention this because while these five lawyers argued in court that non-competes are an important tool of American commerce, none of them would be at risk of being sued by the NAM if they took a job with a rival organization—such as the Association for Manufacturing Technology or (God forbid) the AFL-CIO. That's because the American Bar Association does not allow “Non-compete clauses in partnership, membership, shareholder or employer agreements.” What is a feast for the goose should not be confused with a delicacy for the gander.